What Is an Order Management System (OMS)?
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Talk to our experts- Order management system (OMS)
- An order management system (OMS) is software that tracks sales, orders, inventory and fulfillment across sales channels, from receipt of an order to delivery. It routes each order to the best fulfillment location, handles returns, and unifies orders into one dashboard. An ERP, by contrast, gives a bird's eye view of every business function.
Also called: OMS
How it works
Shopify's guide to order management describes the same process for every order that arrives in an OMS:
The order management process
When a customer clicks Purchase on a website, app, retail store or marketplace, the OMS captures the data.
The OMS decides the best fulfillment method, for example a warehouse or a local store.
The OMS sends the order to the chosen location: a warehouse management system, or the store's POS.
The OMS prints a packing list, and it or a shipping tool compares carrier rates for the label.
If an item is damaged or a package is lost, the OMS flags the order for the team to investigate.
Once the carrier scans the package, the OMS emails the customer an order-tracking link.
Along the way, an OMS tracks inventory levels by channel, automates the fulfillment process, handles reverse logistics, manages customer information, and merges order and financial data. Shopify notes that a good OMS should route orders not only by a customer's proximity to a warehouse, but also to minimize split fulfillments or to rank priority locations.
OMS vs. ERP vs. WMS
Shopify separates the systems by what each one owns:
- Order management system (OMS): unifies and orchestrates orders from multiple sales channels. Used by order fulfillment teams.
- Enterprise resource planning (ERP): offers a bird's eye view of every business function. Used by accountants and executives.
- Warehouse management system (WMS): optimizes operations in a warehouse or distribution center. Used by warehouse staff.
- Transportation management system (TMS): coordinates last-mile delivery.
Example
A distributor's buyer orders 80 cases of filters and 40 cases of housings, 80 + 40 = 120 cases in all. The filters are stocked in the East warehouse and the housings in the West warehouse, so the order is routed to both.
On Shopify, that one order gets separate fulfillment orders for East and West, because a fulfillment order is an item or a group of items to be fulfilled from the same location. The East warehouse ships the 80 cases of filters and the West warehouse ships the 40 cases of housings. Each shipment is recorded as a fulfillment with its own tracking information, and the order record lists its fulfillment orders.
On Shopify
Shopify includes a built-in order management system in every plan. Merchants can process orders from the online store, in store and from other sales channels and marketplaces, and Shopify automatically routes orders to the best fulfillment location based on order-routing rules the merchant sets.
For custom workflows, the FulfillmentOrder object in Shopify's GraphQL Admin API models an end-to-end fulfillment process. Order management apps can query orders and inventory levels, create fulfillment orders and send fulfillment requests. Order routing apps use Shopify Functions to add custom location rules and fulfillment constraints, and only stores on the Shopify Plus plan can use custom order routing location rules. Shopify also lists ERP integration among OMS features, linking back-office systems for financial and operational oversight.
How Uncap helps
With Uncap Connect, the ERP stays the system of record and Connect keeps Shopify in sync with it rather than replacing it. Orders placed on the storefront land in the ERP, and fulfillment updates from the ERP land back on the storefront.
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Frequently asked questions
What do order management systems do?
An OMS tracks inventory levels by channel, automates order fulfillment, handles returns, manages customer information and merges order and financial data, so the customer gets what they ordered and both sides know when it arrives.
What does OMS stand for in retail?
OMS stands for order management system: the tools that help retailers track orders, inventory and fulfillment.
What is the role of order management in logistics?
Order management decides where each order ships from, a warehouse or a store, and sends the order to that location's warehouse management system or POS. It then tracks fulfillment and delivery status with connected shipping providers.
